Fourth Pirates Of The Caribbean Is Most Expensive Movie Ever With Costs Of $410 Million

I cover the theme park industry and the business of Formula One. Here is a list of the services my company provides:
https://www.formulamoney.com/products/

The fourth instalment of the popular Pirates of the Caribbean franchise has been revealed to be the most expensive movie in history with production costs of $410.6 million according to new research by Forbes.

Pirates of the Caribbean On Stranger Tides was released in May 2011 and stars A Lister Johnny Depp as Captain Jack Sparrow on a quest to find the fabled fountain of youth. The movie was filmed in England at the historic royal naval college in Greenwich and Pinewood Studios where the production used the vast majority of the sound stages.

Shooting in the United Kingdom made it eligible for a government film tax credit scheme which entitles movies with expenditure of more than $34.1 million (£20 million) to claim back up to 20% of their production costs. The expenses of movies qualifying for the scheme are consolidated in a single company which is unusual in the film industry. It makes it easier to work out a movie’s entitlement under the tax credit scheme and it gives great insight into its finances.

The companies tend to have code names and the one which produced On Stranger Tides is known as Blackbeard Productions in a nod to the infamous pirate who is played in the movie by British actor Ian McShane. It is ultimately owned by the Walt Disney Company which produced and distributed the movie.

Although On Stranger Tides was released in 2011 its financial statements are still being released as they relate to prior periods. The final set was filed earlier this year and shows that between October 2009 and April 2013 the production costs came to a total of $410.6 million (£240.7 million). It makes the movie the most expensive of all time even when compared to historical productions adjusted for inflation.

According to recent research by the Business Insider website, the most expensive movie of all time was the second Pirates of the Caribbean with total costs of $341.8 million. It is followed by 1963’s Cleopatra which cost $339.5 million when its original $44 million budget is adjusted for inflation.

Despite the huge production costs, Disney’s haul from On Stranger Tides was impressive. The movie had a worldwide box office gross of $1,045,713,802 according to analysts Box Office Mojo with theaters taking around half of that.

According to the financial statements, Disney didn’t overspend when making On Stranger Tides. They say that “the directors consider the company’s key financial performance indicator to be whether ‘Pirates of the Caribbean On Stranger Tides’ is produced in line with the agreed budget. At the period end, the estimated cost of the film was in line with its budgeted cost, and the film continued to be funded by the financiers.”

One of the biggest costs of making On Stranger Tides was paying the production staff and actors with Mr Depp alone believed to have received $55 million for the movie. The production staff peaked at 895 and they were paid a total of $17.8 million (£10.4 million).

The spending brought a tremendous boost to the UK economy in addition to keeping British production staff in jobs. It explains why big ticket movies are eligible for the tax break and On Stranger Tides is no exception.

The financial statements say that “the directors consider the company’s key non-financial performance indicator to be whether ‘Pirates of the Caribbean On Stranger Tides’ qualifies as a British Film under UK Film Tax Credit legislation. This is likely to be achieved as ‘Pirates of the Caribbean On Stranger Tides’ has been awarded a final British Film Certificate.”

Disney was handed a total of $32.1 million (£18.8 million) from the UK tax authorities to make On Stranger Tides and it was money well spent.

According to the British Film Institute, the tax relief costs the UK treasury around $256 million (£150 million) annually but in terms of Gross Domestic Product (GDP) it contributes $20.50 (£12) to every $1.70 (£1) spent. The tax breaks have made the UK a popular location for filming and the London area alone is home to almost 30 movie-making locations. They include Shepperton Studios and its counterparts Leavesden and Ealing in addition to Pinewood.

Disney has chosen the UK as the location to film this year’s blockbuster Maleficent as well as three movies based on its Marvel comics division - Captain America, Guardians of the Galaxy and Thor 2. Filming is underway at Pinewood on Disney’s sequel to its 2012 hit Avengers which is the third highest-grossing movie of all time.

It also picked Pinewood as the home of the new movie Star Wars: Episode VII which is currently shooting. In June its director J.J. Abrams was pictured at the Buckinghamshire studio with UK chancellor George Osborne who said “I have been determined that we back our brilliant creative industries which is why we have invested in skills and training as well as providing tax relief for films, high-end TV, animation, video games and regional theatre.”

He added “it is great news for people working at Pinewood Studios, from the set designers to the carpenters.”

Last month Pinewood reported that its profits almost tripled to $6.1 million (£3.6 million) in the year to the end of March thanks to an increase in the number of Hollywood productions being filmed there. To make the most of it Pinewood is now preparing a $340 million (£200 million) expansion to double filming space. It can’t come soon enough.

In November Edgar Wright, the director of British movies Hot Fuzz and The World’s End, said that “while the tax break is good for Hollywood films shooting here, it’s probably not that great for British films shooting in the UK. Some middle-to-low budget films are going to find themselves without crew because all the American films are shooting here.”

A fifth instalment of the Pirates franchise is being planned and Mr Depp will return to play Jack Sparrow. It has been given the provisional title of ‘Dead Men Tell No Tales’ and is due for release in 2016. In January Norwegian directors Joachim Rønning and Espen Sandberg told industry website Deadline that they will be shooting the movie “at the end of the year” in both Puerto Rico and New Orleans. If that happens then it may never be possible to tell whether Disney’s spending on it tops its predecessor.